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Great Reset
The Great Reset was a period of global economic and social upheaval lasting throughout most of the 2010s and 2020s. The period was defined by civil unrest and conflict over the social order in most countries, resurgent nationalism and the collapse of international systems, and global economic stagnation marked by rampant income inequality. The exact beginning of the Great Reset is still hotly debated by leading economists and historians, but most generally agree that the era's end came with that of the Revolutions of 2027 globally and with the dawning of the Seventh Party System in the US. Features 'Economic malaise' Most economists agree that the Great Recession was the initiating event for the economic conditions of the Great Reset, however some economic historians argue that the Late 2010s Recession should be seen as the beginning of the Great Reset. In either case, the global economy of the 2010s was marked by disruptive recessions and atypically slow recoveries with extreme income inequality. The conditions for the Great Reset stemmed from the Great Recession, globalization, and the retirement of the Baby Boom Generation. Efforts to reduce trade barriers made it easier for corporations to export manufacturing to cheaper foreign labor markets, leading to a decline in traditional domestic manufacturing jobs that was ultimately concluded with the Great Recession. Rising wages in developing nations did not lead to a return in traditional manufacturing as companies simply retooled for cheaper automated processes. All of these trends disproportionately impacted the lower middle classes, and prior to the Late 2010s Recession, older working class men suffered the most. Prior to the Late 2010s Recession, the bottom 47% of Americans could not afford their homes, leading to economic anxiety and the rise of right wing nationalism. Additionally, the drop off in economic activity following the recession and the retirement of the baby boomers resulted in a steady increase in the Personal Savings Rate, and a decline in effective demand, effectively signalling the end of "supply side economics." 'Wealth Inequality' The unequal distribution of wealth remained high during this period, having grown to the highest levels since the Great Depression. The wealthiest 10% of US earners accounted for 49 percent of the nation's total income, while the top 1% accounted for 20% of total income. Wealth inequality had been steadily increasing from the 1980s to the Great Recession, however after the Crash of 2008, the problem was exacerbated, due in part to government policy at the time favoring bailouts of financial institutions over public works programs and economic nationalization. As a result by the Bear Market cycle of 2018-2019, median household wealth remained 40% lower for lower income families, and 33% lower for middle-income families than before the Great Recession; while upper income families saw a 10% growth in household wealth. From 2007 to 2015, middle income households had fallen from 61% to 50%. After the Late 2010s Recession, it had fallen again to 40%. These conditions were made worse by the fact that the cost of a home in 2015 was roughly four times a median income family's average annual income, and nearly two-thirds their annual income to buy a car. By 2020, 70% of American households were duel income, compared to in 1959 when almost all homes were single income, and a median income family could afford a house with roughly double their average annual income. 'Automation and the "Gig Economy"' Arguably the most significant economic trend of the Great Reset was the rise of automation and the explosion in the size of the US Freelance workforce, known colloquially as the "Gig Economy." While seen in popular media as a positive trend, the gig economy's rise was largely used by startups and major corporations as a means of eliminating the need to pay for worker healthcare and pensions. By 2017, 35% of the US workforce were considered some form of Freelancer, either as a full time or secondary job, and the majority of these workers were over the age of 50. After the Late 2010s Recession, these conditions extended to younger workers as the retail sector of the US economy collapsed due to declining disposable income among older consumers who were forced to absorb the bulk of their health and retirement costs. New automated management software made it even easier for corporations to effectively outsource the majority of their workforce, and by 2021 a majority of the US workforce were considered Freelancers in at least some capacity. Automation in management allowed wealth concentrated at the coastal regions to contract even further, leading to further declines in effective demand, and greater anxiety and outrage among the workforce. Despite this, the unemployment rate in the US continued to decline as older generations retired and former retail workers either filled their jobs, or moved into freelance work. The cause of the Great Reset was not lack of wages from unemployment, but a contraction in effective demand as the primary consumers of large portions of the economy became retirees and were forced to reduce their expenses toward consumer goods in favor of filling the gap left by the destruction of pensions. In short, as labor became more expensive, money became cheaper and had less buying power, and workers were left shouldering the bulk of their healthcare and retirement expenses. 'Labor shortage' For 500 years labor was always in surplus and as a result capital was expensive, but the Great Reset saw this paradigm flip to where labor became more expensive than capital for the first time in the history of industrial capitalism. The retirement of the baby boomers shifted a greater percentage of the workforce toward elderly care and healthcare services, leaving fierce competition for workers in the service and tech sectors of the economy. Automation played a greater role in reducing the demand for humans in services, but all these automated systems led to a greater demand for IT workers, but did little to impact the demand for healthcare workers in the aging population. Companies were able to pay their employees higher wages than at any time in US history, and many advocated for universal basic income (UBI) or increased minimum wage to reduce competition for labor across the country, when in truth the far greater expense would be to simply cover the cost of healthcare for their workforce. The adoption of automation and labor saving technologies ultimately did not close the productivity gap, and outsourcing to the Indian Ocean basin was hotly opposed by nationalist wings of the Democratic and Republican parties. 'Resurgent Nationalism' The chief political argument of this era was between established Neo-Liberals or "Globalists" and new Nationalists wings of major parties. Neo-Liberalism had been the primary force behind the push for global free trade policies and economic deregulation, exemplified by thinkers like Milton Friedman and Alan Greenspan. Nationalism was seen by neo-liberals as a disruptive and dangerous force, largely dominated by ultra-right wing figures like Donald Trump, Viktor Orbán, and Marine Le Pen, however it remained a controversial position well into the 2020s. Nationalism dimmed somewhat as a mainstream political coalition during the late 2010s recession which saw a resurgence of center-left neo-liberal governments in opposition to largely ineffective right-wing nationalist governments in the west. Right wing coalitions between traditionalists and nationalists splintered in light of the recession, but those that remained became even more militant. Neo-liberal led left-wing parties maintained a tenuous alliance with economic nationalist wings until the middle of the decade when a combination of increasingly bleak economic conditions and the impact of climate change saw progressive nationalists coalitions break off and form new parties on the left. Many nationalists who voted with the right wing in the 2010s had actually joined these movements, despite their origins as a Red-Red-Green alliance. 'Race-based violence' This period saw a resurgence in violence directed against minority groups, especially in Caucasian-majority countries. The primary driver for this violence was the growth in personal wealth and power of minority groups that had historically been treated as second class citizens in these countries. While non-whites in Europe and America were objectively more disadvantaged than their white peers, poorer whites saw the recent prosperity of some minority groups and the 2010s refugee crisis as part of some larger conspiracy against caucasians; this hostility was further extended toward women and non-hetero-normative groups. Race-based violence came to a boil in Europe during the late 2010s recession, which saw mob violence against Arab refugees in much of Southern and Eastern Europe. Anti-semetic groups also grew in power during this period as right-wing nationalists devolved into outright neo-Nazi and racist groups. Race-based tensions in the United States came to a head during the 2010s. In 2014, following the Shooting of Michael Brown, the Ferguson unrest took place. Accusations of racism or racial bias by the American social and justice systems had fueled widespread protests (and occasionally riots), mainly by African-Americans, in many parts of the country. Later on, racially-fueled shooting of Caucasian police by armed African-Americans had alternatively gave rise to counter movements. Race relations deteriorated and racial violence wasn't as high since the 1960s Civil Rights movement. Caucasian groups in the United States, who were growing tired of increasing accusations of racism against whites was a main factor that gave rise to White Nationalism. 'End of Agrarianism' The economic conditions of the great reset emerged in parallel to several major social trends that placed additional stresses on the social order. Worldwide, birthrates were falling and female participation in the workforce was rising, and in the developed world had been equal to that of men for a generation. These trends signaled a breakdown in traditional family structures that had been in place for much of human history and caused a confrontation between traditionalists and progressives as to the future of national identities. The Early 21st Century had been defined by a growing divide on "social issues," such as Same-Sex Marriage, Gender Equality, and Religious Acceptance. By 2010 the United States struck down regressive bans on marriage and public service that targeted queer individuals. These social reforms, while popular, ran into extreme opposition from religious communities. Internationally, similar efforts to give women greater economic access led to social upheaval and even violence in less developed nations. The general consensus among historians is that the social unrest experienced during this period can be attributed to the breakdown of social norms that had been in place from when humans first developed agrarian societies. The economic conditions of the Great Reset beget an acceleration in the erosion of the economic drivers behind an agrarian social order that valued patriarchal family units with large numbers of children. The decline in manual labor jobs disproportionately impacted older men, and the decline in buying power that disproportionately impacted younger people reduced the availability in disposable capital that was often used to support a family. Turning Point Social unrest boiled over during the Revolutions of 2027. The environmental catastrophe of The Flood resulted in the sluggish economic conditions and social unrest of the period being exacerbated. The reduced buying power of the workforce contributed to food shortages and even famine, while labor needs could not be met to aid in the rebuilding effort in the damaged cities on the East Coast. Alt-Right and Alt-Left groups became more belligerent during this period, and the risk of domestic terrorism grew to a level that surpassed the social upheaval of the 1960s. The Great Reset came to an end during the Price administration's reforms to the US economy following the Market Crash of 2027. US monetary and financial policy was restructured, and labor markets reformed to encourage immigration. As the broader economic trends were normalized, with a combination of government reforms and a restructuring of the social contract, cheap money and a premium on labor radically shifted the distribution of wealth. Additionally, the crash in the Housing market led to the price of land falling further increasing individual buying power. Per Capita GDP increased dramatically as a result. The most important change of the Great Reset was that where for the past 500 years bankers and financiers were most favored for amassing personal wealth, in a labor-scarce society having pools of labor to broker became the means to great wealth. This gave rise to the labor brokers and human capital management firms. Category:21st Century Category:21st-century economic history